Defensive Plays for a Fear-Driven Market: StockTwits

NEW YORK (TheStreet) -- Investors searched for safe-havens Monday morning before the market open. After suffering through two straight days of losses that dragged the major indices into the red for the year, long investors on StockTwits.com discussed which sectors are least likely to be impacted by a major correction. They settled on one: big telecom.

AT&T (T) and Verizon (VZ) were among the top-trending tickers on StockTwits.com late Sunday and early Monday morning. Investors banked on the theory that U.S. consumers would always pay for television and Internet, no matter how much money their 401K sheds or how sluggishly the economy grows. A knowledge economy like America's, they reasoned, could cut back on everything but communication.

The multiples for AT&T and Verizon are certainly considerably lower than those of other tech communication companies.

AT&T has a price to estimated 2015 earnings of 12.48, according to stats on Yahoo! Finance. It was one of the only stocks to remain green in the past two days. StockTwits pegs AT&T sentiment as 100% bullish. For reference, Facebook (FB), which is growing far faster and makes most of its money through advertising, has a 2015 P/E ratio of 34.84.

Verizon, on the other hand, fell 1.9% from Thursday and edged lower in the pre-market. However, StockTwits' sentiment remained strong. The crowd was 92% bullish. The company trades at a forward 2015 price-to-earnings ratio of 12.29.

Some investors on StockTwits doubted that AT&T and Verizon were sure bets in a correction. They argued that voice-over-IP from cable companies was stealing their traditional phone business and free Wi-Fi hot spots offered by Facebook, Google (GOOG) and others could make it possible to avoid paying for cell-phone data plans. They also said that messaging apps like WhatsApp, which Facebook acquired for $19 billion in February, could enable cell phone users to avoid paying texting fees.

Cablevision has "hot spots" in my area but are capable of making the entire space wifi -- I believe companies like $VZ lobby hard to limits

However, other investors countered that so-called disruptive technologies would take a long time to actually disrupt AT&T and Verizon's business. For the most part, Internet will be delivered by cables controlled by the phone companies, they said.

@nahrafsfa$fb. You are wrong. Big $$$ will own the pipe and it won't be FB

It's not surprising that talk of defensive plays would dominate discussion. Despite a futures market that pointed to gains in the Nasdaq (QQQ) and S&P 500 (SPY), most investors still felt bearish. Sentiment on the ETF that tracks the S&P 500was 70% bearish before the open, according to StockTwits analytics. Sentiment on the ETFs that tracks the Nasdaq and the Dow (DIA) hovered around 58% and 60% bearish, respectively.

At the time of publication the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.